Saturday, November 01, 2014

Dibrugarh University - Management Accounting (2013 - Old Course)

2013 (Old Course)
Management Accounting
Speciality
Full Marks: 70
Pass Marks: 28
Time: 3 Hours

1. (a) “Management Accounting is concerned with accounting information that is useful to management”. Explain the statement.                                         14
Or
(b) Discuss the limitations of Financial accounting and point out how far Management Accounting helps in overcoming such limitations.                                          6+8=14

2. (a) Enumerate the significance of break-even point, margin of safety, contribution and profit-volume ratio in managerial decision-making.                                              3.5x4=14
Or
(b) The following data are available from the records of a company:

Sales      Rs.60, 000
Variable cost      Rs.30, 000
Fixed Cost           Rs.15, 000
You are required to calculate:
(i) P/V ratio, break-even point and margin of safety at this level;
(ii) the effect on BEP at 10% increase in selling price;
(iii) the effect on margin of safety at 10% decrease in selling price             (2x3) +4+4=14

3. (a) From the following budgeted data, forecast the cash position at the end of April, May and June, 2012:        14
Month
Sales
Purchases
Wages
Miscellaneous Expenses
February
March
April
May
June
120000
130000
80000
116000
88000
84000
100000
104000
106000
80000
10000
12000
8000
10000
8000
7000
8000
6000
12000
6000
Additional Information:
(i) Sales: 20% realised in the month of sales, discount allowed 2%. Balance realised equally in two subsequent months.
(ii) Purchases: These are paid in the month following the month of supply.
(iii) Wages: 25% paid in arrear following month.
(iv) Miscellaneous expenses: Remain outstanding for one month.
(v) Rent: Rs.1000 per month paid quarterly in advance due in January, April, July and October every year.
(vi) Income tax: First instalment of advance tax Rs.25000 due on or before 15th June.
(vii) Income from investments: Rs. 5000 received quarterly in April, July etc.
(viii) Cash in hand: Rs.5000 on 1st April, 2012.
Or
(b) What do you mean by budget and budgetary control? State the objectives and limitations of budgetary control.                4+5+5=14

4. (a) The following schedule shows the Balance Sheet of Life Line Ltd. at the end of the year 2011:
Liabilities & Capital
01.01.11
31.12.11
Assets
01.01.11
31.12.11
Share Capital
8% Debenture
Sundry Creditors
Outstanding Expenses
Depreciation Fund
Reserve for Contingency
Profit and Loss A/c
115000
45000
51500
6500
20000
30000
8000
115000
35000
48000
6000
22000
30000
11500
Cash and Bank Balance
Book Debt
Temporary Investment
Prepaid Expenses
Inventory
Land and Building
Machinery
45000
33500
55000
500
41000
75000
26000
45000
21500
37000
1000
52000
76000
35000

276000
267500

276000
267500

Additional Information:
(i) 10% Dividend was paid in cash.
(ii) New Machinery was purchased but old machinery costing Rs.6000 was sold for Rs.2000, accumulated depreciation was Rs.3000.
(iii) Rs.10000 8% debenture was redeemed by purchase from open market @96 for a debenture of Rs.100.
(iv) Rs.18000 investment was sold at book value.
You are required to prepare Cash Flow Statement of Life Line Ltd.                            14
Or
(b) Define the term “Fund flow”. What are the purposes of preparing Fund flow statement? Write four limitations of Fund Flow Statement.                                              2+8+4=14

5. (a) What is Standard Costing? How does it help in keeping a control over cost? Point out its limitations.              4+5+5=14
Or
(b) The budget and actual sales for a period in respect of two products are given below:
Product
Budgeted Quantity
Price
Actual Quantity
Rate
A
B
1000
2000
20
15
1300
2300
21
14

3000

3600

Calculate:
(i) Sales value variance
(ii) Sales Volume variance
(iii) Sales price variance
(iv) Sales mix variance                                    3+3+3+5=14


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